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Route ServicesStrategic plan

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ContentsForeword and summary 3

Vision, values and purpose 4

Our Leadership 6

Objectives 7

Delivery strategy 20

Headwinds and efficiency 29

Risk and Financial Management 30

Sign-off 32

Appendix A Scorecard 33

Appendix B Stakeholder Engagement 34

Appendix C Key assumptions 35

Appendix D Glossary of terms 37

Appendix E Service Catalogue and passenger impact 40

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Foreword and summary Since Route Services was established in 2016, we have strived to create a business that meets the needs of our route, region and national customers. Over the past four years, Route Services has successfully integrated further teams and services, whilst improving performance.

Today Route Services consists of 4,800 people and spends £1.5bn per annum delivering or investing in our 60 services. We are committed to spending this money wisely, delivering best value to our customers and passengers. In Control Period 6 (2019-2024), Route Services will directly deliver £0.4bn of efficiency through a combination of transformational change and small, continuous business improvements. Furthermore, we support and facilitate the indirect spend of a further c.£5bn per annum across the wider business through our commercial and procurement team. We do this with the same attention to delivering best value for the customer and passenger.

However, our customers continue to demand more from us, and we are developing our organisation to offer the high performing, cost-competitive and commercial approach that they expect. With this challenge in mind, embracing the Network Rail vision and values, we have developed a revised Route Services offer for CP6.

This is to:

• be easy to do business with and behave like a service organisation

• provide a choice of business and operational services that are value-driven and commercially competitive

• deliver service excellence in line with agreed customer and passenger expectations

• advise and support our customers to make the best service choice

• engage and empower our teams and protect their safety and wellbeing.

We have a robust plan to transform our business to meet the changing needs of our customers through Control Period 6 and into Control Period 7 (2024-2029), whilst delivering the value for money services that our customers demand.

Susan Cooklin, managing director, Route Services

Susan Cooklin, Managing director, Route Services

“We will be our customers’ and suppliers’ trusted partner of choice: one team continuously improving our delivery performance, quality and cost-competitiveness for a better railway.”

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Vision, values and purposeRoute Services’ vision is the same as that of Network Rail:

Route Services plays a vital role in the success of Network Rail achieving this vision for our passengers and freight users. We need to be our customers’ and suppliers’ trusted partner of choice: one team continuously improving our delivery performance, quality and cost-competitiveness for a better railway.

“A company that is on the side of passengers and freight users; that is easy to engage with, an efficient and dependable partner; a company people are proud to work for; instinctively recognised as the industry leader.”Route Services’ vision

Always safe Safety is not negotiable. With clear accountabilities, we must challenge ourselves and our colleagues every time we witness unsafe behaviour.

Care about people Respect, kindness and empathy are all part of treating others the way we wish to be treated. It is simply about asking ourselves ‘how can we better care for the passengers that we serve every day?’.

Teamwork is key It’s about mutual support, no matter what. We pull together as one rail industry, with the needs of passengers and freight users at the heart of what we do.

Empowered to ACT We’re empowered to do the right thing for those who use the rail network. It is about removing barriers and ensuring that we have what we need to be able to act, when and where it’s required.

Having brought together experts in a broad range of specialisms, including information technology, logistics, commercial and procurement, engineering design, training and asset data management, we have a huge opportunity to collaborate as a team to create innovative changes and continuous improvements to our service offerings for the benefit of our customers, passengers and freight users.

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Route Services consists of six primary functions:

Supply Chain Operations delivers the logistics, materials, components as well as rail and road fleet that enable the maintenance and renewal of the railway, whilst minimising disruption to passengers.

Commercial and Procurement (C&P) strategically sources and manages contracts of scale in order to optimise value across the network.

Information Technology (IT) shapes, builds and runs the information technology services needed to support the railway, now and into the future.

Business Services manages the support systems needed to keep Network Rail working effectively, including Finance and Human Resources services, Training, our National Records Group.

Asset Information Services (AIS) collects, analyses and shares data and intelligence about Network Rail’s infrastructure assets and maintains key asset systems and tools.

Engineering Services (ES) provides the efficient and effective delivery of multi-disciplinary design and engineering services. Network Rail Design Delivery (NRDD) now forms a fundamental part of this function.

These teams are supported by Finance and Business Support, Route Services Transformation and Human Resources.

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Our leadership team

Susan Cooklin Managing Director, Route Services

Nigel Ash Managing Director, Network Rail Consulting*

Mark Lunn Engineering Services

Director

Rob Morton Supply Chain

Operations Director

Mark Enright Transformation

Director

Mark Tarry Business Services

Director

Louise Kavanagh Finance & Business

Support Director

Aidan Hancock Chief Information

Officer

Liz Zukowski HR Director & Head of HR

Clive Berrington Commercial &

Procurement Director

Jason Saxon Asset Information Services Director

Newly established service function responsible for

the engineering, design and development service.

Infrastructure, Construction and engineering, Fleet and

Track Treatment and Delivered Material.

Supporting transformational change, competitive services and making us destination of choice for customer

and supplier.

Managing support systems – HR shared services, training, National Records

Group, financial systems and processes.

Finance and Business support

Route Services requirements efficiently, effectively and flexibly.

IT services and equipment and investments in strategic, innovative

and fit-for-purpose IT for the future.

Providing support on all people related issues and responsible for attracting,

recruiting and facilitating a safety conscious and high-performing workforce.

Commercial and Procurement manages our wide range of contracts through

innovative strategies and cost-effective solutions.

AIS specifies, collects, evaluates, collates, analyses and shares data

and information about Network Rail’s infrastructure assets.

*Network Rail Consulting is a subsidiary of Network Rail Infrastructure Limited. Its Strategy Business Plan does not form part of this Route Services’ Strategic Plan. To find out more about Network Rail Consulting please visit their website: networkrailconsulting.com

ObjectivesSafety vision

The Route Services vision is aligned to the Network Rail safety vision, Everyone Home Safe Every Day, and safety is integral to everything that we do. We are uncompromising in our commitment to the health, safety and wellbeing of our people, passengers, customers, and supply chain.

In CP5 (2014-2019) Route Services achieved one of the lowest lost time injury frequency rates (LTIFR) in Network Rail. However, we recognise that this is just one dimension of safety performance and this good performance is not consistent across all our teams, with some pockets of excellence, and other areas where improvement is required. We believe that incident free operation is possible and are focused on the challenge of driving a consistent safety culture across a diverse Route Services workforce, to make this a reality and deliver our safety vision.

Safety of our people

Route Services has a large, geographically dispersed workforce who face many different safety hazards every day. There are 53 per cent of our people based in route offices and depots, with 40 per cent in central offices and training centres. Front line employees make up 7 per cent of our overall workforce. Through actively participating within the Network Rail safety community, we can learn from and share best practice in making our people safer. Previously the aim was for a LTIFR target of less than 0.1 by the end of CP6, this will now be replaced with the Fatality Weighted Index (FWI) in line with the national scorecard measure, and we expect consistently good performance from all of our teams.

Route Services’ health and safety strategy has been created to provide the vision and framework to drive continuous improvement in the health and safety of our supply chain and staff. Whilst we have a low LTIFR we have has a number of accidents, events and significant near misses that highlight the need to focus on our control of work, and safety and compliance culture. We will proactively support the safety taskforce and the national safety culture programme with the aim of reducing our risk and delivering our safety vision.

Supplier quality assurance (SQA)

Route Services is committed to providing our customers with quality products and services. We will add value for our customers by delivering a robust, risk-based quality assurance framework to assure products are delivered within engineering specification and provide services to high levels of service excellence by aiming to exceed customer expectations. Our focus through the Safety, Health, Environment and Quality (SHEQ) strategic key themes is on safety and reliability via risk-based quality assurance, prioritising safety critical products and underpinning design for reliability.

Route Services – Locations

Central Office

Depot - Frontline Homebased

Frontline Homebased

Regional Office

Training Centre

5.68%

39.62% 34.50%

13.48%

6.72%

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Customers and communities

Out of our 60 services, we have nine (listed opposite) that directly impact passengers or freight users.

For these services we understand current levels of performance and where required, establish targeted improvement plans so that our service performance meets or exceeds passengers’ expectation.

• Lifts in stations

• Escalators in stations

• The operational property helpdesk – used to log a fault at a station, for example

• Digital signage – directly used by passengers, for example looking at screens at stations to find out about engineering works

• Public website – directly used by suppliers, industry partners and passengers for information

• TD.Net – A Train Describer service which indirectly feeds customer information at stations

• Integrated train planning system – indirectly provides timetable information to our passengers

• Very short-term planning – a system to support last minute changes to services

• Trainbourne infrastructure monitoring – technology is used to identify faults on the track.

Our other services indirectly impact passenger or freight users. For a full list of services, see Appendix E.

Route customers have clarity on how to engage with us, and service levels are defined and reported across all our services. Integral to the Route Services scorecard are our customer and passenger led service performance measures. These are a selection of services identified with our route customers as being critical to their businesses’ success. Our scorecard provides our people and customers with clear line of sight, demonstrating how what Route Services delivers aligns with our vision. Our scorecard for 2020/21 can be found in Appendix A.

We are establishing the same level of accountability that a supplier would have to its customers in a commercial environment. For some of our services the remit is wider than only Network Rail customers, we also provide services to the wider rail industry. Route Services has a key role in the running of the railway and as a result we manage a diverse group of stakeholders. Our stakeholder engagement map can be found in Appendix B.

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Customer Experience Programme

Our business change programme supports the successful implementation and embedding of a service excellence approach across the entire service portfolio.

The programme will aim to increase the understanding and capability of Route Services’ executive, senior leadership group and team members in delivering service excellence. The programme will be fully aligned to the National Service Excellence programme sponsored by Caroline Murdoch, group communications director and managed by Andy White, customer services director. Measures of success will include a quantifiable improvement in customer feedback, an increase in team engagement scores and the reduction of anecdotal ‘poor service’ feedback received by members of the Route Services team.

We know we need to be easier to engage with, which is why we have set up a dedicated Customer Service Experience team. The team will equip leaders with the knowledge, skills, content and resources to inspire their teams and through developing a clear vision for customer service for Route Services, one that’s aligned to the Network Rail vision. We will develop customer service strategies based on local insights and practical experience. We want all our employees to think and behave like a service organisation, living and breathing customer focused behaviours.

JamesCustomer

AliCustomer service

SimonRoute Services – HO

JennyRoute Services – C&P

Colleague enabling teams

Passenger enabling teams

Passenger facing teams

Passenger

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People

Route Services understands that to deliver great service we need to gain and sustain the engagement and trust of our people.

In providing support to our people, line managers and employee representatives we aim to create a company our people are proud to work for, for example:

a) We place the safety of our passengers, workforce and the public at the centre of what we do. At the same time, we emphasise the importance of behaviours to underpin our company values, displaying a combined service and safety mindset measured by our scorecard performance and individual performance objectives throughout the year.

b) We invest in the development of our leaders so they can support our people and to encourage teamwork and collaboration with colleagues in pursuit of a caring, inclusive, efficient and productive employee environment.

c) We regard everyone as ‘talent’ and wish to create a climate where our people can play to their own strengths, starting with our early entrants up to executive leadership levels. Our aim is to support personal development to match our Route Services’ skills portfolio underpinned by client needs, at the same time keeping a watchful eye on critical resources for the purposes of succession for roles and sustainable service delivery for the future.

d) We are striving to broaden our already diverse workforce profile. We have set ourselves positive action targets in areas of gender and BAME recruitment. We recognise the benefits colleagues bring from many underrepresented groups for example, colleagues with neuro-diverse cognitive abilities, we are striving to attract them too. We are planning our resource needs for the short, medium and long term, seeking out the talent we need to support, not only our passengers directly, but also our passenger facing and passenger enabling teams in the successful operation of the railway.

e) We are investing in supporting our people through organisational change, beginning with transparent and timely communications delivered by the Route Services leadership teams. This is followed by an onboarding session that is tailored to each team’s specific needs. We also provide opportunities for collaboration across our diverse service portfolio with the aim of Route Services continually improving service delivery to our route and region customers.

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Train service delivery

We know that passengers and freight users want a reliable train service. Our services contribute both directly and indirectly towards train service delivery.

Direct services include the seasonal fleet, which forms a key part of Network Rail’s commitment to making our rail infrastructure resilient to the effects of weather. Indirect services include our materials delivery fleet, which assists the regions to carry out work to the infrastructure, improving asset reliability and driving down service affecting failures.

Effective engagement with customers in the routes and regions provides an ever deeper understanding of the challenges they face, so we can use our specialist knowledge to identify how we can best respond. Already this has led to initiatives such as improving timetable resilience and access availability by reviewing and recasting the timetable for our engineering train services and the development of an autumn season performance improvement plan.

The overall improvements to our services over the past two years have continued through year one of Control Period 6 (2019-2020). Modernising our fleet and professionalising our engineering services is delivering positive train performance results.

Our new grinding and milling fleet that removes railhead defects is starting to perform really well and is a popular service with our route customers. In 2019/20 rail milling has delivered an efficiency of nearly £20m and we expect to achieve at least this level of saving every year for the remainder of Control Period 6. We are finalising the details of a new seasonal fleet for autumn, which is due for delivery in 2020. These seasonal units will supplement our existing fleet and provide improved service resilience for years to come, whilst new leaf clearing technology is developed.

Stoneblowing machines, which make sure that track is aligned correctly and is level along the rail to ensure smooth, comfortable journeys, remain our weakest performing assets. Our 20-year-old fleet is delivering a performance of around 95 per cent, significantly missing our 99 per cent target. We have funding in Control Period 6 to replace this fleet with modern units, capable of stoneblowing on both plain line track and switches and crossings, these new trains are under construction.

We have now brought together our asset information teams with our fleet engineering experts and the focus will be on new and emerging technology to improve asset information led decision making.

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Sustainable growth

As our customers’ businesses change and evolve, our operating model and service provision will need to continue to develop in partnership with our customers to best meet their needs and the needs of our passengers.

The increase in size of our service portfolio presents an opportunity to consider a more effective and efficient way of delivering our services. By continuing to work closely with our customers, we will review the new portfolio to determine whether specific services are still required. This will include agreeing whether further services should be devolved to the route or regions’ customers.

We will look at redesigning existing services to improve delivery for our route and region customers, for example the planned introduction of the Digital Factory, this is a fast-paced IT delivery method that sees customer concepts quickly turned into business IT solutions, delivering immediate value to the customer. We will continually review our service mix and whether it is delivered internally or externally with a view to delivering the optimal balance to meet our customers needs.

It is essential that our decisions and activities that affect the environment locally and globally reduce environmental risk and increase business opportunities through sustainable development.

Route Services is a member of the Sustainable Growth Committee, the focus of this group is on driving progress in the areas of bio-diversity, resource optimisation, electrification, capacity allocation, digital railway and the target for being carbon net-zero before the government target of 2050.

Our focus for CP6 will be:

• Empowering our people to make a real difference on the sustainability agenda

• Deepening sustainability by design in our procurement and design processes

• Being a trusted partner for Industry and Government, working collaboratively on shared sustainability priorities

• Being responsible custodians of our depots and facilities.

We will actively sponsor and/or deliver initiatives aligned to the Network Rail environmental strategy for example, leading on the strategy to reduce the carbon footprint of our road fleet and proactively engaging with our supply chain to deliver more innovative and environmentally sustainable services for the future.

Page1 Putting passengers first

Sustainability in Route Services – Our Principles

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Innovate Integrate Collaborate

We innovate to deliver sustainable benefits for

our customers

We make sustainability a core component of

everything that we do

We collaborate with our customers to realise their sustainability ambitions

We continually improve our sustainability performance

Improve

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Financial

By the end of CP6 we will have delivered efficiencies of £381m across our increased catalogue of services (£369m is the original Route Services CP6 commitment, plus £12m commitment by AIS). We will achieve our CP6 year 1 targets for efficiency and spend.

Route Services controls and influences a considerable amount of money on behalf of Network Rail. Consequently, we have a critical role in ensuring value for money. We directly manage £1bn of these services for the route businesses and other customers and procure a further £2bn of spend per annum on behalf of the business.

Around 85 per cent of our direct spend is delivered through the supply chain and subject to competitive tender. Our target is to enable between £350m and £450m of efficiencies opportunity for the regions and routes.

The tables below shows the breakdown of Route Services expenditure (net of recharges to other business units). Details of gross costs can be found in Section 4 below.

Unit of Measure

CP6 (£m)CP6 Total

19/20 20/21 21/22 22/23 23/24Information Technology £m 95 120 106 109 110 540

Business Services £m 18 16 14 13 13 74

Commercial and Procurement £m 16 14 14 14 14 72

Engineering Services £m 0 0 0 0 0 0

Supply Chain Operations £m 5 1 -3 -1 -1 1

Asset Information Services £m 46 56 66 63 63 294

Other £m 9 12 17 14 19 71

Total Controllable costs £m 189 219 214 212 218 1,052

Headcount FTEPermanent FTE 4,318 4,439 4,436 4,436 4,433

Agency FTE 222 163 137 137 137

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Renewals costs (post headwinds and efficiencies in cash prices)

Other Renewals (National Functions) Unit of Measure Funded by

CP6 (£m)CP6 Total

19/20 20/21 21/22 22/23 23/24Wheeled Plant and Track £m Renewals 66 64 126 162 173 591

IT and Business Services £m Renewals 150 90 83 94 94 511

Asset Information Services £m Renewals 1 3 13 11 3 31

Total Renewals £m 217 157 222 267 270 1,133

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Risks, opportunities, constraints and assumptions

Finance Deliver all CP6 commitments within the constraints of our agreed cash envelope whilst being able to demonstrate value for money.

No.Key constraints (C), risks (R), opportunities (O)

What we plan to do Owner Timescale (end date)

1 O: IT innovation IT strategy is based on the early adoption of IT innovation services and disruptive technologies which offer the potential to transform IT operations and proactivity address the needs of Network Rail and GB Rail.

IT – Chief Information Officer

Ongoing

2 A: IT scope Explicitly excludes business change costs related to the implementation of new technology (other than IT training costs or business change which is introduced solely due to a Route Services IT led change initiative).


Ongoing

3 R: Funding categories

Due to restrictions in movement of funds between Opex and Capex, decisions could be skewed towards buying assets rather than service based delivery. This may create a conflict between the best value for money solution and most effective use of available funds.

Route Services – Finance Director Ongoing

4 O: Make versus buyPrior to any new purchase or renewal of wheeled plant fleet, a comprehensive review of market capability and investment payback will be undertaken to ascertain the best funding vehicle (i.e. purchase or lease) and investment level.

Supply Chain – Operations Director

July 2020

5 R: Digital Railway funding

Development of the Route Services capital costs associated with Digital Railway (predominantly cab fitment and investment in information technology) is at a very early stage with high uncertainty. There is a risk that funding will not be sufficient to cover those costs as they are incurred.

Route Services – Managing Director

Ongoing

6 R/O: Foreign exchange

Material changes to foreign exchange rates could impact on funding required where Route Services buys from companies based outside the UK.

Route Services – Finance Director Ongoing

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Performance Support the wider business and railway system to achieve improved overall performance. Understandably customer expectation is increasingly demanding and therefore we must collaborate to implement changes necessary to meet this in a cost effective, structured and transparent manner.

No. Key constraints (C), risks (R), opportunities (O) What we plan to do Owner Timescale

(end date)

1 O: Delay Per Incident (DPI)

Continuous improvement approach to reducing delays per incident by reduction of fleet service delivery failure and improved ability to affect service recovery following failure.

Supply Chain Operations Director

Ongoing

2

R: Asset condition deterioration with challenging age profile of many assets and associated obsolescence.

Improved information capture and condition monitoring with regular assurance programme. Leading to more effective decisions about maintenance, enhancement, life extension and replacement. Flexibility in intervention through re-prioritisation of funding.


Ongoing

3 O: Design for reliabilityEmbed a consistent culture and process of designing to optimise asset reliability. Improved quality of management information for the provision of service with agreed targets (KPI’s) aligned with customer needs.


Ongoing

4 O: Reliability centred maintenance

Optimising maintenance so that it is centred on reliability through a systematic approach to inspection, data, analysis and decision making.


July 2020

5 O: PlanningIncreased planning integration with customers and suppliers (e.g. aligning NRT and RSIT planning processes) to deliver robust and timely plans which can be confidently executed. Develop a relationship where parties work as a single team with one focus.


Ongoing

6 O: Innovation Identify and develop innovation that can deliver value for money performance improvement through exploration of alternative approaches.


Ongoing

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Performance Support the wider business and railway system to achieve improved overall performance. Understandably customer expectation is increasingly demanding and therefore we must collaborate to implement changes necessary to meet this in a cost effective, structured and transparent manner.


(end date)

7 O: Devolution Further devolution where appropriate will enhance our ability to react and promote local accountability. In turn this will drive delivery performance.


Ongoing

8 R: DevolutionLoss of line of sight from risk to control as a result of devolution where accountability is poorly defined and not mandated. As part of the process of devolution it must be made clear where accountability and responsibility lie.


Ongoing

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R: Sleeper supply Construction of a new sleeper factory was due to commence in 17/18, with production expected in 20/21. We will lose production at Washwood Heath (the facility this is intended to replace) in 18/19 to a PCO.

Construction was originally scheduled to start in May 2018 and complete by December 2019, with production expected to be at capacity by August 2020. Due to technical and consent issues, the development proposal was revised and planning permission is now expected in early 2020. To meet foreseen demand, until the facility is operational (Jan 2022), a stockpile has been amassed and an interim supply contract tendered. These measures ensure there is adequate inventory to meet all of CP6 foreseen demand. This is revised and monitored each period. Washwood Heath is no longer producing sleepers for Network Rail as of November 2019.

Route Services – Supply Chain Operations – Materials & Logistics Director

August 2022

10 R: Cyber SecurityThere is a risk of hostile or malicious acts exploiting vulnerabilities in Network Rail's cyber systems leading to loss, compromise or disruption impacting the operational railway, business services and supporting processes.


July 2020

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Safety Improvement across Route Services of the safety, health and environment of the workforce, passengers and public to increase safety maturity and deliver our vision of everyone home safe every day. Advance our environmental performance and leave a sustainable legacy.

No.Key constraints (C), risks (R), opportunities (O)

What we plan to do Owner Timescale (end date)

1 R: Workforce safety

Hierarchy of control measures for design, maintenance, inspection and operation for risks such as working at height, protection of staff from moving equipment and electrical risks. Embedding an inclusive and mature safety culture (safety hour, safety campaigns linked to key safety risks and the Home Safe Plan, and robust safety leadership). Effective application of managing occupational road risk policy and support the role out of Vehicle Tracking Systems.


Ongoing

2

R: Workforce occupational health and wellbeing

Reducing occupationally induced ill-health through initiatives for HAVs, WBVs, manual handling, noise, fatigue, respiratory hazards and poor ergonomics. Effective application of managing occupational road risk policy and support the role out of Vehicle Tracking Systems. The provision of adequate and appropriate welfare facilities for staff. The embedding of an inclusive working environment, that delivers positive mental health and wellbeing of individuals.


Ongoing

3R: Workforce, passenger and public

Predict and prevent accelerated and/or unexpected asset degradation or failure through information capture and condition monitoring leading to effective asset plans. Regular assurance programme to confirm asset condition. Flexibility in intervention through re-prioritisation of funding. Safety and reliability by design. Lead on risk-based supplier quality assurance to assure and deliver a high-quality supply chain.


Ongoing

4 C: Barriers to improvement

Challenge barriers of legacy equipment, regulations, cost effective technological limitations, culture and funding through a behaviour of structured continuous improvement and innovation that can deliver incremental changes that can create transformation.


Ongoing

5R: Environment and sustainable development

Initiatives to reduce our supply chains carbon footprint and sustainably manage the fleets (engine emissions, release of harmful substances to the environment, disposal of life expired assets). Wider integration of our corporate social responsibility obligations in to our contracting strategies by building in sustainability by design.


Ongoing

6O: Workforce, passenger and public

Enhanced health and safety across all products and services through sustainability by design in our supply chain management and creating innovative solutions to eliminating and mitigating health and safety risks.


Ongoing

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ReputationAchieving our targets and aspirations in the realms of safety, performance and finance will enable Route Services to support the wider business to run a safe, reliable, efficient and growing railway, and contribute significantly to achieving Network Rail’s over-arching strategic objective of delivering a better railway for a better Britain. This will support and enhance Network Rail’s reputation, increasing confidence in us from our suppliers, customers and the regulator.


(end date)

1 R: Workforce, passenger and public

Should a failure on the part of Route Services contribute to a major safety incident resulting in injury or death to our workforce, passengers or the public, ongoing negative media coverage will impact our stakeholders, customers and create a negative perception of Network Rail among public and passengers.


Ongoing

2 R: Workforce, passenger and public

By sharing the positive ways in which Route Services works to protect people in terms of safety the overall perception of Network Rail improves.


Ongoing

3 R: Workforce occupational health and wellbeing

The risks presented by ballast dust/particulate inhalation and other workforce safety hazards could leave the business vulnerable to legal challenges such as a class action or prosecution, with negative accompanying media coverage.


Ongoing

4 O: Supporting timetable, trains on time – reliability

By meeting our delivery targets and contributing to handing the railway back in a safe state Route Services contributes to the smooth running of the timetable and service provision, creating more opportunities for positive media coverage.


Ongoing

5 O: Environment and sustainable development

Running the railway includes some activities which pose a real threat to the environment, such as disposal of waste, fuel storage, increased emissions. The work being undertaken across Route Services in recycling, sustainable sourcing of materials, environmental impact studies and mitigations, provide opportunities for positive reporting.


Ongoing

6 R: Sleeper SupplyThe stockpile, interim supply and close monitoring of supply and demand have mitigated the reputational risk of running out of sleepers. There remains reputational risk form the build-out of the facility, as there is an opposition campaign mobilised that can stimulate local media and political interests.


Ongoing

7 O: Social ResponsibilityThe part Route Services plays in supporting the apprenticeship scheme, building a diverse and inclusive workforce, care for our lineside neighbours, and in safety initiatives, such as improving driver safety, all positively contributes to our reputation as a good corporate citizen.


Ongoing

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Delivery strategy Supply Chain Operations

Our core CP6 plan focuses on optimising our current portfolio of services and the seamless introduction of new areas including the transfer of High Output Track into Route Services and the addition of train borne rail milling.

Scope/volume changes

There was significant scope/volume change during CP5, principally driven by changing operating models, devolution of activities, as well as variability of demand across financial years, leading to increased spend through under-utilised resources and reduced realisation of contract efficiencies. Despite this, we delivered our CP5 efficiency target, which provides confidence in our ability to do the same in CP6. The wheeled plant Capex fund is impacted by a £167m non-cyclical impact in CP6 due to the nature of a number of its core assets requiring renewal and the introduction of new assets to the category. It has been agreed with the regions to devolve On Track Plant (OTP) funding to align with asset ownership and decision making.

Efficiencies

We have committed to delivering a gross efficiency of £207m over CP6 (5% of gross Opex spend) which is a direct saving for our customers and embedded in the regional business plans. Delivery of this efficiency is underpinned by the Supply Chain Operations’ transformation themes and supported by the benchmarking outcomes. It includes the exploitation of synergies across the supply chain for a number of our key services and the optimisation of our High Output maintenance and operations model. This is offset in part by our need to recognise headwinds including market conditions increasing supply chain costs and the impact of inflation.

Engagement with the regions that places them at the heart of decision-making will align service provision with passenger and freight user needs. Supply Chain Operations has a net Opex budget of zero, with the budget for all products and services held within the individual regional businesses.

Base cost for CP6 based on 2018/19

spend (£m)

Scope / Volume Changes

CP6 pre-efficient

(£m)

Head-winds (£m)

Efficiency (£m)

CP6 Post Efficient

(£m)Gross Opex 4,202 (247) 3,955 586 (207) 4,334

CP6 – Supply Chain [£4,334m] Gross

Heavy Materials

Haulage

Indirect Spend

Track Treatment

OTM

Other

629

427

536

1,246

815681

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Supply Chain Operations – Capex

Category CP5 total (£m)

CP6 total (£m)

Variance (£m) Comments

High Output 123 102 (21) Overhaul of the required BCS, TRS and OTM fleets which also partly addresses fleet reliability concerns. Enhancement of HOOB’s / maintenance facilities.

Incident Response 0 6 6 Rationalisation and renewal of recovery cranes and support vehicles.Infrastructure Monitoring 16 44 28 Renewal of the life expired slow speed fleet as foreseeable technology will remain speed constrained thus precluding

potential TOC/FOC fitment. Overhaul of remainder to maintain capability.Intervention 128 123 Rail Profile

Treatment (32) New milling capability to support turnkey service to treat increasing heavy and severe (RCF) on the network which unless treated would require a significant programme of re-railing. Overhaul of grinding fleet

Stoneblowing 50 Renewal of life expired plain line machines. Modern equivalent replacement will additionally provide S&C capability. Increased Route demand as treatment enables life extension rather than renewal of the track.

MMT 9 Overhaul of the Mobile Maintenance Train (MMT) fleet and reliability improvements OLE Support

Trains (32) Consolidation of High Output Plant System (HOPS) and Overhead Conditions Renewals (OCR) trains with mandatory overhauls.

Locomotives 1 6 5 Overhaul of class 97 locomotives which provide pilot services on the ERTMS fitted Cambrian lines and renewal of ageing locomotives used to support IM with repowered versions.

Rail and S&C 36 55 19 Renewal of the rail delivery fleet with some overhaul to maintain capability during transition. Overhaul of tilting wagons. Materials delivery 17 11 (6) Overhaul of various wagon types and wagon conversions.

On Track Plant (OTP) 58 1 (57) Completion of deferred CP5 works. Overhaul and renewal of various OTP asset types to maintain capability. Additional new requirements in certain Routes. Funding transferred to Regions

Seasonal 8 59 51 Commence renewal of life expiring seasonal Multi-Purpose Vehicles (MPV). Overhaul of various Seasonal assets (e.g. Rail Head Treatment Trains).

Fleet Support 26 53 27 Pan fleet facility overhauls/renewal, innovation and policy compliance. Road Fleet 17 0 (17) Change of operating model for road fleet (ownership to lease) during CP5Digital Railway 0 108 108 See Section 4.7Total scope change 139Headwinds 74 74Total efficiencies (64) (64)Total spend 430 579

21

Information Technology

The CP6 IT plan is centred on the introduction of new digital technologies, new IT delivery methods and investment in new skills, which will collectively unlock improvements for our customers, drive efficiencies and deliver improved performance and reliability of our core IT services.


IT asset volumes and headcount are forecast to grow in CP6 in line with supporting a larger Network Rail population and offering additional services in areas such as innovation, data science and digital technologies. It also reflects a change in accounting treatment for licences (Capex to Opex).

As part of our critical renewal activities in early CP6 we are undertaking a major transformation of both our backend data centre provision and our end user computing service. Our IT delivery transformation programme has now concluded and has led to early realisation of financial efficiencies.


spend (£m)


CP6 pre-efficient

(£m)

Head-winds (£m)

Efficiency (£m)

CP6 Post Efficient

(£m)Gross Opex 349 138 515 74 (21) 540

CP6 – IT Opex [£540m]

Supplier Management

Technical Operations

Service Operations

Information Systems Strategy

Other (Strategy/leadership)

Service Management

2822 10 8

57

415

13.48%

22

Information Technology – Capex

Category CP5 total (£m)

CP6 total (£m)

Variance (£m) Comments

Renewals: Application 42 80 38Includes the renewal of mission critical systems and the consolidation and rationalisation of legacy applications (e.g. rationalisation of Remote Condition Monitoring applications). The planned volume of IT application renewal activity in CP6 is higher than CP5 to enable an improvement in the technical currency of IT asset base.

Renewals: IT Hardware and Infrastructure 147 154 7

Includes the renewal of the core IT hardware and infrastructure supported by IT and the enterprise platforms provided by IT (e.g. Business Intelligence, Enterprise Resource Platform.) The planned volume of IT Infrastructure and Hardware Renewal activity in CP6 is higher than CP5 levels to enable an improvement in the technical currency of IT asset base.

Renewals: IT Licences 136 0 (136) This reflects the change in accounting treatment of our licence costs from Capex in CP5 to Opex in CP6. The anticipated level of IT license renewal has grown to accommodate additional scale of delivery.

IT Improvements 276 227 (49)

Includes the set of investments in information technology required in support of customer requirements, the delivery of the IT Transformation Programme, and the implementation of new capabilities in areas such as the Digital Business Platform, Digital Factory and Innovation Services. The planned volume of IT improvements is lower in CP6 compared to CP5 as the IT Transformation Programme is anticipated to deliver significant efficiency savings across the CP6 timeframe which will offset the reduction.

Total scope change (140) Capex requirements in CP6 have reduced to reflect a planned transition to a service (i.e. Opex) based delivery model. Additionally, CP6 investment in IT Licenses will be treated as Opex spend (not Capex as CP5).

Efficiencies (31) (31) All efficiencies are associated with the implementation of a new IT delivery lifecycle.Headwinds 37 37 Headwinds are associated with the impact of inflation on the cost base.Total spend 601 467 (134)

Out of scope

The submission does not include provision for Network Rail Telecommunications, mobile and tablet device costs, business change costs related to the implementation of new technology, delivery of operational technology capabilities, or any build, deployment, integration and operational support costs for non-IT managed transformation programmes intending to deliver IT change.

The IT transformation plan for CP6 equates to efficiencies of £52m across both Opex and Capex. The efficiencies relate to:

1. How and where we host our IT Infrastructure – Project Noah (£13m)

2. A change in the delivery of our IT projects through a new procurement framework and structured change management (£31m)

3. Development of world class customer technologies and decommissioning of existing hardware – MyIT (£5m)

4. Service transformation – Operational Excellence (£3m).

IT’s capability to achieve transformative outcomes through effective strategic change is now established and to date £3.9m of the anticipated efficiencies have been realised.

23

Business Services

Our CP6 plans focus on an enhanced service provision with a lower cost base to provide value to our customers.


The scope/volume changes from CP5 into CP6 relates to the devolution of training budgets within CP5, impacting the whole CP6 control period plus the change in how the apprenticeship programme is funded (devolved rather than held centrally). The efficiency programme in CP5 has also seen the gross costs of shared services reduce by 18 per cent and the efficiency flows through into CP6.

The majority of the CP6 efficiencies within Business Services are underpinned by the Network Rail Training Modernisation programme. The programme is focused on offering training in locations suitable for the evolving business, utilising the apprenticeship levy and improving the way that training is planned, administered and delivered to benefit the whole business.

The Business Services’ change plan focuses on three core areas of its service offering: shared services, national records group and training delivery. These will bring significant financial benefits as well as a better level of service.


spend (£m)


CP6 pre-efficient

(£m)

Head-winds (£m)

Efficiency (£m)

CP6 Post Efficient

(£m)Gross Opex 411 (6) 405 5 (43) 367

Net Opex 118 (6) 112 5 (43) 74

Capex 0 10 10 1 – 11

Total 118 4 122 6 (43) 85

CP6 – Business Services [£367m]

Shared Services

CI, Assurance, Sentinel

Training delivery

National Records Group

Training, Apprentices, Leadership, Westwood & incl efficiencies

188

15

65

5742

24

Asset Information Services

Asset Information Services (AIS) is responsible for enabling and providing asset data, intelligence and insight through the delivery of key services across three centres of excellence – data collection, data management and data services.

Scope/volume changes The scope/volume changes from CP5 into CP6 relate to the activities we are undertaking in CP6 to improve the flexibility, resilience and performance of our existing services (e.g. capital investment in renewing obsolete systems and equipment) and introduce new and enhanced services to better meet our customer’s needs (e.g. aerial survey, rail depth measurement).

Efficiencies In CP6 we are focusing on priorities which will improve our supply chain capability, review how to get infrastructure information from service trains using digital solutions – reducing the need for a dedicated infrastructure condition monitoring fleet – and timetable impact.

By extending AIS’s management of data to all asset and operational data and information that has a defined value to the customer we will demonstrate greater customer focus and how our portfolio of services is responsive to customer need.

This customer focus and responsiveness will be further enhanced by developing the data management and analysis services we offer to the routes and the wider rail community to enable the more efficient operation of the railway asset base.

We will demonstrate value for money by increasing the cost efficiency, resiliency and sustainability of our systems and services, thereby reducing risk to the business.

Our services include the collection of asset condition data through train-borne systems, plain line pattern recognition (PLPR) and aerial surveys, the management and maintenance of systems and registers including the geospatial Track Centre Line model, the Asset Data Store and the corporate works management system Ellipse, and the provision of over 140 corporate, regulatory and safety-related reports each period.


spend (£m)


CP6 pre-efficient

(£m)

Head-winds (£m)

Efficiency (£m)

CP6 Post Efficient

(£m)Gross Opex 411 (6) 405 5 (43) 367

Net Opex 118 (6) 112 5 (43) 74

Capex 0 10 10 1 – 11

Total 118 4 122 6 (43) 85

CP6 – Asset Information Services [£294m]

Data Collection

Data Management

Data Services

Other Areas

26

32

12

225

25

Asset Information Services

The core CP6 plan is predicated on delivering an enhanced service through a more flexible and responsive approach aligned with our customer’s business objectives.

The implementation of the optimum operating model is well underway with new teams now in place for Category Management and Supplier Management, which are working alongside a revamped Sourcing team to unlock value across all stages of the commercial lifecycle. In support of benefits identified through the Putting Passengers First programme, commercial teams from Infrastructure Projects (IP), Digital Railway and Telecoms are now integrating into Commercial & Procurement, which will facilitate a more comprehensive and coordinated service offering to the regions.

In further support of Putting Passengers First, the teams are assisting the set-up of the regional commercial functions. Through establishing a commercial community across Network Rail with common ways of working, this will further align with our customer and passenger objectives, unlocking increased value and performance against Network Rail’s commercial and operational objectives working in partnership with the supply chain.

The Commercial & Procurement function will facilitate regions and business functions in procuring an estimated £35bn of third party spend across 7 distinct category areas. The commercial efficiencies enabled by the Commercial & Procurement function will be realised within our customer’s cost base.

The transformation programme is on-track for completion in March 2020. It will support and enable the delivery of the commercial efficiencies within the regional and functional CP6 Strategic Business Plans (SBP) across third-party Opex and Capex spend.

Base cost for CP6 based on

2018/19 spend (£m)


CP6 pre-efficient (£m)

Head-winds (£m)

Efficiency (£m)

CP6 Post Efficient

(£m)

62 5 49 5 – 72

CP6 – Network Rail Third Party Spend [Est. Total Procured spend £35m]

Infrastructure

Materials, Operations & Logistics

Corporate Services

Technology

Signalling & Electrification

Track

6.9

9.1

11.7

2.6

3.2

2.1

26

Engineering Services

Engineering Services is a newly created function in Route Services with the objective to improve performance and reduce risk through efficient and effective delivery of multi-disciplinary design and engineering services throughout the project lifecycle.

Network Rail Design Delivery (NRDD) now form a fundamental part of this function following recent changes as part of the Putting Passengers First programme.

NRDD provide design and supporting services to a range of internal customers via regional multi-discipline teams supplemented by national specialist skills. NRDD deliver regional customer focus with strategic national oversight to manage resources around workbank and business priorities, and to holistically engage with the supply chain to provide an integrated service.

Scope/volume changes The award of the Design Services Framework (DSF) in January 2020 allows NRDD to offer an integrated design service to the regional teams increasing capacity, agility and supplementing internal delivery benefits. The DSF has the potential to add up to £80m per annum to our internal delivery of c£50m.

Engineering Services will provide professional engineering, safety and sustainability leadership to Route Services.

Efficiencies NRDD recovers all costs by provision of their services on a neutral net opex basis. The effective delivery of design and associated services provides safety, sustainability and best value solutions to capital programmes and minimises the risk of costly late changes in implementation.

Any increase in volume by integration of supply chain through the DSF will allow NRDD to provide additional benefits to our customers by providing consistency and control of supply chain management, reducing interface risk and costs.

Following the transition into Route Services we are reviewing the NRDD operating model to ensure that our rates provide best value to our customers and that we are structured to provide the most efficient cost management and project delivery.

Engineering Services – split of service provision

Signalling

Buildings and Civils

Electrification and Plant

Project Management Support

Track

Level Crossings

Systems

35%

24%

13%

11%

9%

4% 4%

27

Digital Railway strategy

Included within the Route Services’ capex submission is £140m in relation to Digital Railway to cover European Train Control System (ETCS) fitments on wheeled plant, IT system requirements and capital costs of fitting our training centres for whole life support costs to the routes.

Fitment of our fleet with ETCS will enable us to gain the benefits of the Digital Railway as schemes are completed. In addition, Network Rail Training will have a significant role to play in ensuring that our employees are appropriately trained in a timely manner for new technology as it is deployed across our network. Due to the stage of development of the Digital Railway projects, there is a high level of uncertainty in relation to these costs.

Fund CP6 total (£m) Comments

Wheeled Plant 108

Fitment of European Train Control System (ETCS) to wheeled plant vehicles is an essential enabler to support the deployment of Digital Railway technology. The wheel plant fitment is a national programme which will be co-ordinated and delivered to align with the infrastructure deployment of ETCS across the network, whilst at the same time mitigating impact to service delivery of the fleet. The first phase of this fitment in CP6, which will enable the benefits realisation of the East Coast Digital Programme, includes First in Class fitment to 19 vehicles and fleet fitment to a further 26 vehicles. We have taken an opportunity that arose during the development of the project to accelerate the fitment of four multi-purpose stoneblowers as they were being built, rather than retro-fitment. The contracting strategy is still being finalised for ETCS fitment to the remaining machines within the scope of this project. Costs have been agreed for GRIPs 1 – 3 to enable the devolvement phases of the project to be undertaken, with the full business case to support delivery of GRIPs 4 – 8 expected to be approved by January 2021. All changes shall be managed through our governance process over the project lifecycle.

IT 3

Impact of Digital Railway in CP6 is not assumed to have a significant impact on the operating costs of IT as the bulk of these IT changes are seen as extensions to the signalling systems and therefore owned and managed by the routes. There will still be IT requirements for information to flow from these route signalling systems via Network Rail Telecoms (NRT) through to the corporate Route Services IT systems. As such there is a small amount of CP6 investment requested specifically for Digital Railway.

Digitisation of Network Rail Training Assets

29

To support CP6 Programmes such as Digital Railway, Intelligent Infrastructure and Operational People Capability, NR Training must keep pace with the rate of change of new equipment and new ways of working on the operational network. This workstream seeks to reduce the cost of installing physical assets by fitting out the training centres with a virtual learning environment supported by digital training assets. i.e. Simulators for Initial Signaller Training.

Total 140

28

Headwinds and efficiency CAPEXRoute Services control the funding for capital delivery portfolios in IT, Business Services, Wheeled Plant as well as Asset Information.

Due to the nature of these funds, there are some significant differences to the funding in CP5 resulting from the assets requiring renewal and overhaul being different between the control periods. In addition, IT licences which were treated as Capex within CP5 are now included as Opex.

Within the Wheeled Plant fund, signifcant funding has been included to allow fitment of ETCS equipment onto NR fleet in the last 2 years of the control period. The funding allocated for On Track Plant has been devolved to the regions as they are in a better position to decide how this funding should be best utilised.

Efficiencies to be delivered in CP6 include an enhanced delivery lifecycle with IT including the in-housing of critical resources as well as improved contracting strategies when undertaking the purchase of wheeled plant.

OPEXAll gross Opex incurred by Route Services is allocated to a region either by internal charging mechanisms or corporate level allocation. Route Services’ gross Opex is significantly influcenced by the volumes of goods and services consumed by the regions.

Supply Chain Operations is the largest area of Opex within Route Services. We have commited to providing an efficiency of £207m within this area in CP6 offering better value for our regional customers. This will be delivered through a combination of improving our contracts with 3rd parties to be more closely aligned with business need as well as business change programmes. The most significant contract efficiency is coming through a new rail haulage contract which impacts many areas of delivery for our regional customers. In terms of business change, we are overhauling our stores’ technology and logistics network, moving from one national to nine regional distribution centres. This will permit a more reactive model of providing inventory and reduce overall stock holding. In addition, we will move to a single sourcing agreement for hundreds of our non-rail related stock holding. Headwinds are largely related to increased costs for the provision of heavy materials (rail, ballast and sleepers).

IT are also undertaking a signifcant change programme to move to hardware which aligns closely more closely to roles. We will also be moving our data centre capability from a 3rd party supplier to Crown Hosting.

29

Risk and Financial ManagementThis section sets out our estimate of the degree of financial uncertainty within this plan.The combination of our core CP6 plan, headwinds/tailwinds and efficiencies/inefficiencies is our submission and represents the most likely outcome for CP6. The content of our plans reflect the funding that we understand to be available in CP6. We consider this plan to be realistic and, therefore, deliverable in CP6.

Whilst it is difficult to precisely estimate the likelihood of delivering our plan in CP6, it seems reasonable to suggest that, overall, there is a 45% to 55% likelihood of the outputs in the plan being delivered for the forecast cost in our CP6 plan. This means that there approximately half of the time, we will be able to deliver our plan for the forecast cost. However, this uncertainty varies between expenditure categories.

For example, we consider that there is significantly more uncertainty in our renewals plan than in the support, operations and maintenance plans in CP6. The main drivers of uncertainty in our plan are identified in the table below.

189

238 241 244 252

189 213 202 203 206

0

50

100

150

200

250

300

2019/20 2020/21 2021/22 2022/23 2023/24

£m

Financial uncertainty ranges - support and operations

205

170

245

313 316

205

143

199 214 215

0

50

100

150

200

250

300

350

2019/20 2020/21 2021/22 2022/23 2023/24

£m

Financial uncertainty ranges - renewals

30

AreaSummary of key drivers of the uncertainty rangeDriver of range

Renewals

Technology – With technology models and capabilities pace of change and a transition to Service based delivery model over time (e.g. Software-as-a-Service, Platform-as-a-Service) which will influence the investment balance between capex and opex investment in CP6. In addition, the digital railway investment towards the end of the control period is still in the early stages of maturity.

Market conditions – Uncertainty related to market conditions including demand for plant driven by other infrastructure projects.

Uncertainty in demand – Driven by:

a) Variability of customer demand (peaks and troughs) requirements over time. Base assumes an even distribution throughout the control period.

b) In certain lower level areas stakeholders have not yet reached a level of granularity in their plans to confirm requirements.

c) The application of scenario planning across the business may result in changing demand.

Support and operations

Spot Estimate – Estimates are based on similar activities undertaken in CP5. Given the transformation plans in place across Route Services for CP6 this increases the range of uncertainty, driven by the complexity of the plans and the certainty in them being delivered.

Technology – With technology models and capabilities pace of change and a transition to service based delivery model over time (e.g. Software-as-a-Service, Platform-as-a-Service) this will influence both the cost of supporting and maintaining IT operations plus the investment balance between capex and Opex investment in CP6.

Market conditions – Uncertainty surrounding insolvency events with key suppliers as well as procurement challenges have been factored in.

Total expenditure All consideration for uncertainties apply to the net Route Services spend. Where the gross budget (Supply Chain Operations, Engineering Services, High Output delivery and C&P) exists within the Regions the uncertainty has been captured locally.

Throughout CP5, control of a significant proportion of Route Services’ expenditure was devolved to the geographic routes. We expect this to continue throughout CP6. Given this, if a decrease in expenditure were required due to funding restrictions, Route Services would engage with our customers to understand how to manage this decrease whilst maintaining service levels with minimal impact on operational performance.

31

Sign-off

Susan Cooklin Managing Director,

Route ServicesMarch 2020

Louise Kavanagh Finance Director,

Route ServicesMarch 2020

32

Our scorecard is revised annually in line with changing customer priorities and focus areas. Below is the planned 2020/21 scorecard demonstrating the direct relationship to the national scorecard:

Appendix A Scorecard Route ServicesNational measure

Route Services Scorecard

Vision

On the side of passengers and freight users

Easy to engage with, efficient and a dependable partner

Proud to work for Network Rail

Instinctive industry leader

On Time

Passenger satisfaction (Wavelength survey)

Freight cancellations

Complaints handling

Financial Performance Measure (FPM)

Enhancements

Employee pulse survey

Fatalities and weighted injuries

Contraventions

Social responsibility index

Effective volumes

Passenger safety (TARR)

Services directly supporting passengers

and freight users

Delivery of TrainborneTesting

Services to support on time railway

Services that demonstrate being an

efficient and dependable partner

Social responsibility index

“My train is on time”

“I have a really good journey… because my station is nice, I am safe and if things go wrong I’m looked after”

“I get the freight service I am promised”

“It’s easy to work with Network Rail and we are good neighbours”

“Network Rail deliver what they say they will, when they say they will, for the price they promised”

“Network Rail is efficient & value for money”

“My manager cares about me & I’m proud to work for Network Rail”

“Network Rail helps keep me safe and well”

“I do everything I can to keep myself safe and colleagues safe”

“We are a responsible and environmentally sustainable company”

“We plan for the long term future of the whole railway”

20%

Weighting

10%

5%

4%

Delivery of key milestones

Delivery of net efficiencies / FPM

Employee pulse survey

Fatalities and weighted injuries

Contraventions

Services that demonstrate industry

leadership

25%

5%

10%

5%

5%

5%

Diversity

3%

3%

33

Route Services is made up of six functions, each providing the rest of Network Rail with important services.

While teams will have different priorities for operating efficiently, working together for the common purpose in achieving safe, high performing and value for money services for customers is a shared goal.

The aim of Route Services is to communicate transparently with our valued stakeholders which will result in understanding their businesses better and the challenges they face.

Route Services teams will gain an understanding of stakeholder requirements through various engagement methods.

Listening to stakeholders through customer engagement forums will provide valuable insights for Business Planning Reviews.

Key governance forums, boards and executive customer boards also provide valuable information that forms part of Route Services strategic plans.

Working with stakeholder groups, Route Services teams have developed these strategic plans and continue to engage with customers through a wide range of communications. These include surveys, workshops, meetings, business briefings, Your Voice and feedback to invite comment on CP6 requirements, business plans and people related topics.

Discussions with stakeholders enable Route Services to prioritise stakeholder needs and, by extension, CP6 long term objectives, through understanding of current service shortfalls. This include targeted discussions on key areas such as proposed changes to standards, which would require changes to service.

Good engagement with customers results in a better supply market that is easier to do business with, provides a clearer line of sight to future tender opportunities and supports innovation with Small and Medium Enterprises.

In June 2019, Andrew Haines (Chief Executive) and Susan Cooklin (Managing Director, Route Services) attended Rail Live, one of the largest rail industry events of the year, where they emphasised the need to make it as easy as possible for suppliers to do business with us and to encourage collaboration with our supply chain on innovative solutions.

The National Supplier Conference, also in June 2019, was an opportunity to inform suppliers of our strategy for the year ahead and listen to their key issues and priorities. Network Rail representatives were also present at the Rail Partnership Awards, held later in the evening, to celebrate our supply chain’s contribution towards delivering safe and reliable railway infrastructure.

It is essential that we engage with and listen to our Small and Medium Enterprise (SME) suppliers. Throughout the year we attended a range of SME focus groups and industry association meetings with the insights gained informing our SME Action Plan, published in November

The services provided by Route Services will be more efficient to support faster time to market which ultimately results in a better value offering for all of us across Network Rail.

Appendix B Stakeholder Engagement

NR Exec

Customer Exec

Customer Senior Management Team

Customer Operational BusinessBusin

ess D

evelo

pmen

t

Opera

tiona

l Bus

ines

s

Executive

Senior Route Lead

Route Delivery Director, Functional Director, Business Manager

Service activity owner

Customer Route services

34

Appendix C Key assumptions

Ref no. Topic (e.g. dependency, deliverability, climate etc.) Assumption Areas of spend impacted (e.g. all

opex, single team, all spend etc.)Is this a change of assumption for CP6?

1 Basis of preparationThe CP5 exit rate has been used as the basis for CP6 forecasts. The business will operate within a cash envelope with limited freedom to flex capex and opex should it be needed (e.g. lease versus buy).

All Opex and Capex No

2 Volumes Based upon the known business volumes for CP6 at that point in time. Risk of changing volumes is included within the uncertainty analysis. All Opex and Wheeled Plant Capex No

3 IT ScopeExplicitly excludes business change costs related to the implementation of new technology (other than IT training costs or business change which is introduced solely due to a Route Services IT led change initiative).

IT Capex & Opex No

4 Transformation Programmes

Assumes that the Digital Railway Programme and other transformation programmes are independent from the Route Services submission (e.g. Cyber Security). Where external projects impact upon Network Rail (e.g. HS2) all costs are met by the project.

Digital Railway/ Safety, Technical & Engineering/ External projects No

5 Volumes Volume of IT Renewal activity necessary to maintain technical currency of assets is broadly comparable to CP5. IT capex No

6 Regional BusinessesWhere responsibility to maintain and renew Route Services sites currently sits within the regions, it is assumed that any CP6 costs/headwinds/efficiencies have been captured there.

Facilities Opex and Capex No

7 Delivery of CapexWhere costs rely on the delivery of capex works it is assumed they will be delivered to time. The cost of business change aligned to a capital project will be funded by the project client.


8 Supply MarketThrough competitive tender we will be able to deliver the forecast volumes at current prices (adjusted for inflation). This is discussed further in the uncertainty analysis).

Opex No

35

Ref no. Topic (e.g. dependency, deliverability, climate etc.) Assumption Areas of spend impacted (e.g. all

opex, single team, all spend etc.)Is this a change of assumption for CP6?

9 National framework of delivery

The current model of delivering services the routes collectively decide they want, at the best value for Network Rail will continue to apply. A shift to making decisions on a route by route basis across all Route Services products and services will erode the national value for money picture.


10 Digital Railway fundingDevelopment of the Route Services capital costs associated with Digital Railway (predominantly cab fitment) is at a very early stage with high uncertainty. The plan assumes funding will be sufficient to cover those costs as they are incurred.

All Capex No

11 On Track Machine StrategyAssumes that strategies for OTMs that are selected by routes are in line with those recommended by Supply Chain Operations in order to realise efficiency plans.

Supply Chain Operations Opex No

12 Capital projectsIt is assumed that any capital projects that require new or enhanced services from AIS will have made appropriate OPEX provision in their function’s SBP submission.

All costs No

13 Business volumes and additional service volumes

Business outputs will be materially in line with our strategic business plan submission, both in total volume delivery and annual phasing. Key influencing factors include headcount and Renewal growth within the Regions.

Excluding those agreed service volume increases that are included in this SBP, it is assumed that OPEX costs associated with any increase in required volumes, quality and performance of services above current levels will be borne by customers.

All costs No

36

Appendix D Glossary of termsTerm Description

Asset Information Specifying, collecting, evaluating, collating, analysing, and communicating information about Network Rail’s infrastructure assets to enable accurate, informed decisions, to be made that balance cost, risk and performance

Benchmarking Understanding our position in the commercial world

CAPEX Capital expenditure

CP5 Control Period 5 – 1 April 2014 to 31 March 2019

CP6 Control Period 6 – 1 April 2019 to 31 March 2024

Customer technologies Programme transforming the day to day IT that Route Services IT’s customers use to access their business applications and core productivity tools (e.g. email, PowerPoint)

Cyber security Technologies, processes and practices that protect networks, computers, programs and data from attack, damage or unauthorised access

Digital Railway An industry-wide programme that is responsible for accelerating the digital modernisation of the UK’s railway

Disruptive technologies New technology that transforms life, business, and the global economy

Ellipse An application that Network Rail (provided by ABB Ventyx) uses to manage the information associated with its rail assets

Engineering Services (ES) A function within Route Services with the objective to improve performance and reduce risk through efficient and effective delivery of multi-disciplinary design and engineering services throughout the project lifecycle.

ERTMS European rail traffic management system.

ETCS European train control system.

HAV Hand arm vibration

HOPS High output plant system

37

Term Description

IP Network Rail’s Infrastructure Projects business

IP Track A unit within Infrastructure Projects that delivers renewals and enhancement of Network Rail’s track infrastructure

IT Innovation Services Develops and delivers innovative IT technologies for Network Rail

KPI Key performance indicator

Legacy applications Applications considered old and in need of modernisation – typically preventing a move to more modern hosting / support arrangements or which may reside on proprietary hardware

Make versus buy The decision between manufacturing a product in-house or purchasing it from an external supplier

Milling fleet A fleet of maintenance trains which correct track defects by removing a thin layer of the railhead.

MMT Mobile maintenance train

MPV Multi-purpose vehicle

Network Rail Consulting The consulting arm of Network Rail. This aims to enhance Network Rail’s reputation by winning international consultancy assignments and showing that we have world-leading expertise in delivering innovative, value for money projects.

Network Rail Design and Delivery

Part of the Engineering Services function within Route Services that provides design and supporting services to a range of internal customers via regional multi-discipline teams supplemented by national specialist skills.

Noah IT’s direct contact transformation programme.

NRT Network Rail Telecoms directorate within Group Digital Railway

OTP On track plant

Operating model An operational design that delivers the business strategy

OPEX Operational expenditure.

OCR Overhead line condition renewals team within the Supply Chain Operations directorate

38

Term Description

Rail Fleet Specialised engineering trains and wagons

Route Network Rail’s infrastructure is organised into 14 geographical routes, supported by five Network Rail regions.

Route businesses Network Rail’s routes are now fully functioning integrated businesses, making 99% of all decisions

Route Services Transformation Route Services’ contribution to Network Rail’s transformation programme

Supply Chain Operations A Route Services function that manages the supply, operation and maintenance of our rail fleet, along with the procurement and delivery of a wide variety of railway materials and components

Tailwind Conditions in which growth moves higher

Technical currency A measure of how up to date our technology, both hardware and software assets, is – measured of a percentage of assets currently under mainstream or extended support from the vendor

TOC Train operating company

TPS An application Network Rail (provided by HaCon) uses to plan the operational timetable for all movements on the rail network

Vehicle tracking systems Hardware and software that identifies a vehicles location, and provides an array of reporting information

WBV Whole-body vibration

Wheeled plant Rail-borne plant including on-track machines, road rail vehicles and rail cranes

39

• Delivery of materials by rail

• Delivery of materials by road

• Tamping

• Stoneblowing

• Infrastructure monitoring

• Profile treatment – rail grinding

• Profile treatment – rail milling

• Signal works (national)

• High Output track renewals

• Seasonal – autumn

• Seasonal – summer

• Seasonal – winter

• Breakdown recovery

• Road fleet

• Recycling services

• Enquiry service – public request for archives

• IT incident management

• Skills training

• Mechanical & electrical locking filters

• Building infrastructure information technology projects

• Sourcing and supplier management covering such contracts as:

– Design and build of platforms, footbridges and subways

– Contract management of services such as contingent labour, cleaning stations, car parks, graffiti, fly tipping, on track plant and utilities.

Appendix E Service Catalogue and passenger impact

Services that indirectly impact the passenger:Services that directly impact the passenger:

• Lifts and Escalators

• Operational property helpdesk

• Availability management including:

– Public website

– Digital signage

– TD.net – train positioning

– ITPS – Train planning system

– TSIA – Train service

– PLPR.

40

• We provide design & engineering consultancy along with specialist design & project services

• We invoice and collect from our customers

• We recruit our employees

• We pay our employees

• We pay our suppliers

• Abnormal loads

• Offer competence assurance

• We resolve shared services queries

• Sentinel delivery

• Management of isolation diagrams

• IT strategy and planning services

• IT helpdesk

• Content management

• Local IT delivery management

• Information security

• IT delivery projects

• Request fulfilment

• Aerial survey

• We supply iStore materials

• We provide the safe and effective provision of High Output Track Renewals

• Mobile maintenance team

• Overhead line condition renewals

• Project Engineering

• Project Management Services

• We collect and process asset information

• We analyse asset data and provide asset information reporting

• We collate and distribute asset information

• We manage and maintain asset information processes and systems

• We implement the data specification, design and configuration of asset information systems

• We provide business partnership & post-contract management for Network Rail Telecoms

• Procurement Operations

• Category Strategy

• We provide pre-contract & post-contract management for the Digital Railway Programme

• We provide post-contract management, assurance & governance, collaboration and claim management for Capital Delivery Projects

• We provide supply chain management, procurement services and guidance for Capital Delivery Projects

• We provide pre-contract and post-contract management for Capital Delivery Signalling Projects.

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